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Petroleum Porn: The XXXL Pipeline

I want my fair share — and that’s all of it: Charles Koch

Excerpted from Palast's new book, Billionaires & Ballot Bandits: How to Steal an Election in 9 Easy Steps

Illustrations by Ted Rall

Like all great American stories of wholesale plunder, the hunt for the connection between the unsourced hundreds of millions of dollars and missing ballots begins in Indian country. I was working an investigation of the theft of oil from the Osage Indian reservation in Oklahoma. This is two decades back. The Osage were dog-dirt poor, but they pulled in a couple of bucks, say thirty dollars a week per family, from the royalties they got from the oil under their trailers.

In the desert emptiness where the US cavalry had driven them long ago, greasy metal “rocking horses,” stripper well-pumps, pull up a few barrels a day. Saudi Arabia it’s not. It’s not even worth running pipes. So the Osage contracted with the Koch Oil Company to take their liquid away in tanker trucks.

A tribal skeptic and troublemaker, the kind of troublemaker I like, Stanlee Ann Mattingly, would watch a truck suck out 240 barrels. And the driver would write down 232. Then the next week: 361 barrels out; 352 written down. Week after week. It’s on film—taken by FBI agents hiding in the gullies behind the mesquite following Mattingly’s complaint.

The G-man followed the Koch Oil trucks back to the loading docks where a tall, fit, blond man would exhort the drivers to increase their “overage”— the skim off the top — or else they could find another job.

The man, an agent told my crew, was named Charles Koch.

Way back then, I needed to explain to my Guardian readers that Charles Koch and his brother David, coowners of Koch Oil, were the “richest men you’ve never heard of.” And the Brothers Koch liked it that way. They operate America’s largest private phone network outside the CIA, and they have no public shareholders, so reporting to the SEC is sparse and public shareholder meetings are none.

I’d been a racketeering and fraud investigator for twenty years already when I jumped into the investigation of the Kochs. Koch’s motive for the skim was obvious: he wanted the money. But, for me, this was a new level of weird. Why in the world would Charles Koch, then worth about $2 billion, want to take three dollars from some poor Indian lady?

It even puzzled his own henchmen. Roger Williams asked Koch, who was literally giggling over the amount of “overage” he’d pocketed, why the billionaire bothered to filch pocket change from Osage families.

Williams was wired, and what he related on the tape has stuck with me a long time. According to Williams’s recording, Koch answered:

“I want my fair share — and that’s all of it.”

But what now? Koch wants “all of it.” Today, he has $20 billion and his brother David has another $20 billion. What in 2012 could a president give them that they don’t already have?

To start with: the Keystone XL Pipeline.

The proposed XL Pipeline would bring thick, gunky tar-sands oil from Alberta, Canada, down across the entire US to Texas, crossing America’s biggest aquifers. God forbid this beast ever burst. Some voters opposed this, mostly those who object to hastening a world where we puke out our polluted lungs into rising seas on an overheating planet.

PT Barnum once said something like, “Nobody ever lost a dollar underestimating the intelligence of the American public.” Nor, for that matter, lost a vote. The Oil-o-crat Party

(Republicans plus oil-state Democrats) blamed high gasoline prices on President Obama, pointing in particular to his delay in authorizing the XL Pipeline. The XL Pipeline, said Governor Romney, would make America independent of foreign oil. (Governor, Canada is not a suburb of Seattle.)

Every Republican candidate announced that, even without a study, even without knowing the route or anything about the XL Pipeline at all, they would immediatelyauthorize it if elected, even if the pipeline poured out into a church housing endangered species. Newt Gingrich has a magic calculator that somehow figured building the XL plus more US drilling would bring down the price of gasoline by over a dollar a gallon.

The attack is very effective with the public, despite its fact-free basis: Obama is President of the United States, not Saudi Arabia, the nation that sets the internationalbenchmark price of oil through the OPEC cartel. I blame Obama for many things, but the price of gasoline and the laws of gravity are beyond his direct control.

Politicians’ competitive lust for crude at all costs has grown from embarrassing to pornographic. Still, why all this enthusiasm for the XL Pipeline in particular? After all, there are plenty of other really stupid, dangerous, boneheaded energy schemes for Congress to blindly authorize.

Progressives looked in vain for the Koch Brothers’ interest in the pipeline or in Canada’s tar sands. But they were looking at the wrong end of the pipe. My question was, Why the hell are we running an oil pipe two thousandmiles to Texas? That’s a bit like “coals to Newcastle,” ain’t it?

The answer is: Flint Hills Refining of Corpus Christi, Texas — now owned by Koch Industries. In March 2012, the price to import light oil from Saudi Arabia was eighteen dollars a barrel higher than the heavy crude that Texas refineries import from Venezuela. East Coast refineries forced to import the premium Saudi oil were going broke, while Gulf Coast refineries like the Kochs’ crank cash — so long as the heavy-crude supply flows.

But there’s a problem over the Lone Star, and its name is Hugo Chavez.

Refineries don’t just “crack” any old crude you dump into them. These filth machines are actually quite sensitive, requiring the right grade of gunk. In all, there are fifteen refineries in Texas designed to refine heavy-crude oil only.

But, since the fall of the American empire, the Texans no longer feel the love from Venezuela, nor its President Chavez. Chavez once told me he has extraordinary respect for America and, as proof, quoted Whitman at length. That wouldn’t impress the oilmen in Texas who think “Whitman” is a kind of chocolate too cheap to buy for their mistresses. Clearly, there is a failure to communicate. Heavy-oil imports from Venezuela into Texas refineries are now getting scarcer and more expensive.

The Rev. Pat Robertson offered this subtle suggestion on his TV show: “Hugo Chavez thinks we’re trying to assassinate him. I think that we really ought to go ahead and do it . . . This is a dangerous enemy to our South controlling a huge pool of oil.”

But failing that magic bullet, Koch’s Texas Gulf Coast oil refineries will have to pipe the “heavy” in from Canada. And that requires the XL Pipeline.

With the election of 2012 approaching, President Obama could see the torches of angry citizens lighting the night sky around the White House. Angry white citizens demanded the XL Pipeline to bring them cheap gasoline. A crowd just as angry was made up of Green people who demanded Obama kill the great, black snake slithering down from Canada to Houston. (Well, that metaphor certainly got out of hand.)

So, Obama did the courageous thing — and announced he wouldn’t make a decision on the XL Pipeline until after the election.

That assumes you’ll be reelected, homey, thought the Brothers Koch.

The two brothers committed to raise a quarter billion to push the president out of the White House and off their Pipe. So they launched Americans for Prosperity. The Kochs’ prosperity.